Modified Internal Rate of Return | MIRR | FIN-Ed

#fin-ed
Modified Internal Rate of Return | MIRR | FIN-Ed
This video is about how to calculate the modified internal rate of return or MIRR using a Texas BA II Plus financial calculator. MIRR is the discount rate at which the present value of a project’s costs is equal to the present value of its terminal value. Terminal value is defined as the sum of future values of all cash inflows. Some projects may have non-normal cash flows and, thus, may have multiple IRRs. In such a situation, project selection might be erroneous or misleading. In order to avoid multiple IRR problems, it is always better to use the MIRR technique while accepting or rejecting a project.

Example:
Your division is considering two projects with the following cash flows (in millions). If WACC is 10%, What are the projects’ MIRR and which project will you accept?

Source: Fundamentals of Financial Management (Concise Edition) Brigham and Houston
Chapter 11: The Basics of Capital Budgeting
Problem: 11-6

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Thanks for watching...!!!

[hengprem]

Thank you, you save my final exam score

[anapaulagutierrez]

Thank you, this was extremely helpful!

[zackei]

Where is the video showing how to do this quicker with the BAII Plus professional?

[SnugglyFruit]

thanks for the help! Though, I was confused by the thumbnail saying MIIR instead of MIRR 😂😂😂

[zohairraza]

Can you share the link for to calculate this on BA-II plus PROFESSIONAL? I couldnt find the link.

[padantyaarundaya]

what if the discount rate and the reinvestation rate is different? what should i input on step 3?

[Heyythatsbrii]

How did you get -33.26 for PV in step two?

[GoodGood-ftfm]

This video is stupid as the calculator and the one who created this calculator and the one who calculated in this video 😂😂😂